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Comparative Advantage and the Performance of Mexican Manufacturing Exports during 1996-2005

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  • Chiquiar Daniel
  • Fragoso Edna
  • Ramos Francia Manuel

Abstract

In this paper we identify Mexico´s pattern of revealed comparative advantages within manufacturing trade flows during the 1996-2005 period. We define a basket of competing countries, according to the degree of similarity of each country´s comparative advantage pattern with that of Mexico. We show that revealed comparative advantages seem to be positively correlated with the relative performance of Mexico´s manufacturing exports to the U.S. market, as measured by the increase in Mexico´ s market share relative to that of its competitors. The analysis suggests that the increasing presence in the markets of countries with similar characteristics as Mexico, in particular from 2001 on, might be causing Mexico to lose comparative advantage in some products in which it had specialized in during the previous years.

Suggested Citation

  • Chiquiar Daniel & Fragoso Edna & Ramos Francia Manuel, 2007. "Comparative Advantage and the Performance of Mexican Manufacturing Exports during 1996-2005," Working Papers 2007-12, Banco de México.
    • Handle: RePEc:bdm:wpaper:2007-12
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    References listed on IDEAS

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    1. Balassa, Bela, 1979. "The Changing Pattern of Comparative Advantage in Manufactured Goods," The Review of Economics and Statistics, MIT Press, vol. 61(2), pages 259-266, May.
    2. Edward M. Graham & Erika Wada, 2000. "Domestic Reform, Trade and Investment Liberalisation, Financial Crisis, and Foreign Direct Investment into Mexico," The World Economy, Wiley Blackwell, vol. 23(6), pages 777-797, June.
    3. Hanson, Gordon H, 1996. "Localization Economies, Vertical Organization, and Trade," American Economic Review, American Economic Association, vol. 86(5), pages 1266-1278, December.
    4. Chiquiar, Daniel & Ramos-Francia, Manuel, 2005. "Trade and business-cycle synchronization: evidence from Mexican and U.S. manufacturing industries," The North American Journal of Economics and Finance, Elsevier, vol. 16(2), pages 187-216, August.
    5. Ballance, Robert H & Forstner, Helmut & Murray, Tracy, 1987. "Consistency Tests of Alternative Measures of Comparative Advantage," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 157-161, February.
    6. S.M. Shafaeddin, 2002. "The Impact Of China´S Accession To Wto On The Exports Of Developing Countries," UNCTAD Discussion Papers 160, United Nations Conference on Trade and Development.
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    Cited by:

    1. Ibarra, Carlos Alberto, 2011. "Maquila, currency misalignment and export-led growth in Mexico," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    2. Chiquiar, Daniel & Covarrubias, Enrique & Salcedo, Alejandrina, 2016. "Labor market consequences of trade openness and competition in foreign markets," Conference papers 332760, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    3. Chiquiar Daniel & Ramos Francia Manuel, 2008. "A Note on Mexico and U.S. Manufacturing Industries' Long-term Relationship," Working Papers 2008-08, Banco de México.

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    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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